NRAM plc

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This article is about the 'bad-bank' of Northern Rock. For other uses, see Northern Rock (disambiguation).
NRAM plc
Public ownership[1][2]
Industry Bank
Founded 1965
Renamed as Northern Rock (Asset Management) in 2010
Headquarters Bingley, England, UK
Area served
Services Mortgages
Owner Her Majesty's Government (UKFI / UK Asset Resolution)

NRAM plc (previously Northern Rock (Asset Management) plc) is a British asset holding and management company which was split away from the Northern Rock bank in 2010. It is currently under public ownership, due to the bank's nationalisation in 2008. The company continues to service a residential mortgage book of approximately £50 billion.

NRAM comprises the bad debts of the former Northern Rock bank and is described as the "bad bank". The remainder, Northern Rock plc, was designated the "good bank", and in 2012 was bought by Virgin Money.[3] Since nationalisation, the assets of NRAM have been sold off in parts, most recently with the sale of £13 billion of mortgages and loans to Cerberus Capital Management in November 2015.


Northern Rock (Asset Management) plc was renamed from Northern Rock plc on 31 December 2009, and the following day the banking assets were split off into a new company called Northern Rock plc. Therefore the current legal entity which exists as Northern Rock (Asset Management) company is in fact the company of the Northern Rock Building Society (founded 1965) which turned into a bank in 1997.

On 14 September 2007, during the financial crisis of 2007–08, the Bank sought and received a liquidity support facility from the Bank of England,[4] following problems in the credit markets caused by the subprime mortgage crisis. At 00:01 on 22 February 2008 the bank was taken into state ownership (see the Nationalisation of Northern Rock). The nationalisation was a result of two unsuccessful bids to take over the bank, neither being able to fully commit to repayment of taxpayers' money.[5][6] To better control the assets of the bank it was decided to split the company in two, forming the new bank and leaving this company as the so-called 'bad-bank'.

On 24 March 2010 UKFI announced its intention to integrate Northern Rock (Asset Management) plc and Bradford & Bingley plc under a single holding company.[7] In October 2010, Bradford & Bingley plc and Northern Rock (Asset Management) plc were brought together under a single holding company, U.K. Asset Resolution Ltd.[8]

On 3 August 2010 the company announced pre-tax profits £349.7m for the first six months of the year.[9] On 1 October 2010 the bank announced that another £700 million had been paid off of the loan in the last three months.[10] During 2011 £2 billion of the loan was repaid.[11] On 23 July it was announced that Virgin Money would be acquiring £465 million worth of mortgage assets from Northern Rock (Asset Management) plc.[12]

In December 2012 an administrative error was uncovered in the wording of the loan agreements made by the bank in 2008 for around 152,000 customers; the error may cost an estimated £270 million. As a result of the error the affected customers, who were borrowing £25,000 or less, may be entitled to a repayment of interest.[13][14]

In July 2013, private equity firm JC Flowers agreed to buy $450 million of the bank’s loans from the British Government.[15]

On 16 May 2014 the company changed its name to the shorter NRAM plc.

In 2015 UK Financial Investments announced it would seek expressions of interest for the divestment of mortgage servicing capabilities of the business as well as the Granite securitisation vehicle. UKFI appointed Moelis & Company as advisers for the divestments.[16] In November 2015, the company confirmed the sale of £13 billion of mortgages and loans to Cerberus Capital Management, largely made up of a part of its Granite portfolio, for £280m more than their book value.[17] Cerberus immediately sold £3.3 billion of mortgages to the UK bank TSB.[18]


The black 1990s Northern Rock buildings at Regent Centre in Gosforth. One of the buildings built in the 2000s can also be seen

Northern Rock (Asset Management) holds and services the majority of existing mortgage and unsecured loan accounts. The company does not offer any new products and has no branches.

The Northern Rock (Asset Management) was based on the same large site at the Regent Centre in Gosforth, Newcastle upon Tyne as the Northern Rock bank until 2013, when the staff moved to UKAR's other sites in Doxford and Bingley.[19] The registered office was also initially Northern Rock House but is now in Bingley.

NRAM held the assets of the "Granite" securitisation vehicle, created by Northern Rock in 2001 to parcel up the mortgages provided by the bank and sell the value to investors. In 2008 Granite had a value of around £45 billion.[20] After the liquidity crisis and subsequent nationalisation of Northern Rock in February 2008, Granite was put into run-off in order to reduce exposure for the UK taxpayer, meaning that Northern Rock the bank would no longer supply it with fresh mortgages and bondholders would be repaid as old mortgages expire.[21]

Corporate image[edit]

Northern Rock (Asset Management)'s logo is the letter NRAM underlined and in grey. Initially Northern Rock (Asset Management) used the same corporate identity as the bank; this was introduced in 2000 and consists of a magenta square containing the company name.[22]


HM Treasury announced on 22 February 2008 that it had acquired all the shares in Northern Rock and that all entitlements to shares issued by the company had been extinguished by a Transfer Order made under the Banking (Special Provisions) Act 2008. The Transfer Order came into force, and the transfers under it were made at 00:01 on 22 February 2008. Therefore shares cannot be bought or sold.

Permanent Subordinated Bonds (PSBs) were issued by Northern Rock and although the fixed dividend payments are currently suspended the PSBs are still traded (symbol NRKP). Their coupon is 12 5/8% and as at January 2012 they trade at just under half their issue price of 100p. Although interest is not currently paid it may be at some future point should NRAM cease to be government owned and in that case all back payments of interest may become payable.[citation needed]

Board of directors[edit]

For a discussion of the board prior to 1 January 2010, see Northern Rock#Board of directors.

Since the company split into two parts, each separate entity has had its own board of directors. With the merger of this company with the mortgage assets of Bradford & Bingley under a single holding company, Richard Pym, Chairman of both companies is to be appointed Chairman new holding company, and Richard Banks, currently Managing Director of Bradford & Bingley has been appointed Chief Executive designate.[23]

Northern Rock (Asset Management) board as of 1 January 2011:

  • Chairman: Richard Pym
  • Chief Executive: Richard Banks
  • Executive Directors: Andy Tate
  • Non-Executive Directors: Kent Atkinson, Sue Langley, Keith Morgan, Philip Remnant

See also[edit]


  1. ^ "Northern Rock now in public hands". BBC News. 22 February 2008. Retrieved 6 April 2008. 
  2. ^ "The Northern Rock plc Transfer Order 2008" (PDF). HM Treasury. 22 February 2008. Retrieved 6 April 2008. 
  3. ^ "Northern Rock sale announced by chancellor". BBC News. 17 November 2011. Retrieved 17 November 2011. 
  4. ^ "Liquidity Support Facility for Northern Rock plc - Tripartite Statement by HM Treasury, Bank of England and Financial Services Authority". Bank of England. 14 September 2007. Retrieved 20 February 2008. 
  5. ^ "Northern Rock to be nationalised". BBC News. 17 February 2008. Retrieved 8 April 2008. 
  6. ^ "Rock recovery is Sandler's goal". BBC News. 18 February 2008. Retrieved 20 February 2008. 
  7. ^ "Bradford & Bingley plc and Northern Rock (Asset Management) plc" (PDF). UKFI. 24 March 2010. Retrieved 24 March 2010. [dead link]
  8. ^ "Demutualised building societies" (PDF). Building Societies Association. August 2012. Retrieved 6 October 2012. 
  9. ^ "Northern Rock returns to profit". BBC News. 3 August 2010. Retrieved 3 August 2010. 
  10. ^ "Northern Rock 'bad bank' pays £1bn". Press Association. 1 October 2010. Retrieved 16 October 2010. 
  11. ^ "UKAR Preliminary Results Announcement 2011". UK Asset Resolution Ltd. 2 March 2012. Retrieved 7 May 2012. 
  12. ^ "U.K. Asset Resolution Sells Mortgages to Virgin Money". Bloomberg. 23 July 2012. Retrieved 23 July 2012. 
  13. ^ "UKAR response to Ministerial statement regarding NRAM". Northern Rock (Asset Management) plc. 11 December 2012. Retrieved 18 December 2012. 
  14. ^ "Northern Rock's £270m error means borrowers pay no interest". The Times. 11 December 2012. Retrieved 18 December 2012. 
  15. ^ Abhishek Takle (17 July 2013). "J.C. Flowers set to buy portion of Northern Rock loans: paper". Reuters. 
  16. ^ "Osborne Says U.K. Plans Faster Sale of Lloyds Shares in 2015". Bloomberg. 18 March 2015. Retrieved 4 April 2015. 
  17. ^ Ping Chan, Szu; Wallace, Tim (13 November 2015). "Government sells £13bn of former Northern Rock mortgages to US private equity firm". The Telegraph. Retrieved 13 November 2015. 
  18. ^ "Northern Rock mortgages sold for £13bn". BBC News. 13 November 2015. Retrieved 13 November 2015. 
  19. ^ "UK Asset Resolution to close Newcastle office". BBC News. 6 December 2011. Retrieved 6 December 2011. 
  20. ^ Aldrick, Philip; Griffiths, Katherine (20 February 2008). "The state of Northern Rock: anything but usual". London: The Daily Telegraph. Retrieved 22 February 2008. 
  21. ^ "Northern Rock calls it a day on Granite vehicle". The Financial Times. 21 November 2008. Retrieved 22 November 2008. 
  22. ^ "Half Year Results 2010" (PDF). NRAM. Retrieved 18 September 2011. 
  23. ^ "Senior appointments: Holding Company of NR(AM)-B&1". Northern Rock (Asset Management) plc / Bradford & Bingley plc. 9 April 2010. Retrieved 9 April 2010. [dead link]

External links[edit]

Coordinates: 55°00′37″N 1°37′34″W / 55.0104°N 1.6260°W / 55.0104; -1.6260